The Interior and Housing ministries said that once the final approval is given, construction tenders for the area will be issued.

Gilo's planned expansion spans 66 acres. The housing units will be built on privately-owned and City-owned land in its southern slopes.

The decision to expand Gilo follows other announcements by the government about various building ventures in east Jerusalem.

Last week, the Jerusalem District Zoning Committee approved plans for 1,500 new housing units in the city's Ramat Shlomo
neighborhood and 2,600 housing units in Givat Hamatos neighborhood.

Gilo neighborhood (Photo: Lowshot.com)

Prime Minister Benjamin Netanyahu's
plan to pursue construction plans in the contested E1 area – which includes east Jerusalem and the West Bank – has met astringent international backlash.

The EU issued a formal censure of the plans, UN Chief Ban Ki-moon warned settlement expansion will paralyze the already crippled Israeli-Palestinian peace process and the US warned of the same.

The Palestinian Authority, emboldened by its new UN status, denounced the plans as a "war crime" and urged UN Security Council action against it. Ramallah has also threatened to seek ICC actions against Israel,
if the government pursues E1 construction plans.

The US State Department urged both side to refrain from taking any irrevocable unilateral steps, saying it hoped cooler heads would prevail.